London open: Stocks decline as investors mull post-lockdown tiers

London stocks fell in early trade on Friday as investors mulled the economic impact of coronavirus restrictions following news on England's post-lockdown tiers.

At 0840 GMT, the FTSE 100 was down 0.9% at 6,307.70, with US markets set to open for just a half-day later, having been closed for Thanksgiving on Thursday.

CMC Markets analyst Michael Hewson said: "This end of week caution appears to be predicated on concern over the short-term economic outlook, as the extension of tighter restrictions on economic activity in France, Germany and the UK creates further uncertainty over the potential for permanent economic scarring as we head into 2021.

"The vaccine story is undoubtedly good news, however there is some concern as to what the economic landscape will look like when we come out of the other side of winter.

"This has seen early weakness in the likes of travel and leisure stocks, with IAG, easyJet, International Hotels Group, Whitbread and Cineworld all slipping a little in early trade.”

Hewson said the new tiered restrictions announced for England on Thursday "weren’t good news for the hospitality sector" after most of the nation was placed into tier 2 or tier 3 for the period leading up to Christmas.

With face-to-face Brexit talks due to resume at the weekend, sentiment took a hit after Reuters reported that European Union Brexit negotiator Michel Barnier told a closed-door meeting for national diplomats on Friday that he couldn't say yet whether a new UK trade deal would be ready in time.

In equity markets, travel and leisure stocks with exposure to Covid-related restrictions were under pressure, with shopping centre owners British Land and Land Securities and British Airways parent IAG all lower.

Upper Crust owner SSP and WH Smith, both of which have outlets at train stations and airports, were also in the red, along with Trainline.

Wetherspoons fell after the pub said half of its pubs would remain closed under the UK government's tiered system when the national lockdown ends on December 2. The company, headed by outspoken chief executive Tim Martin, said 366 pubs would be shut and accused the government of extending lockdown "by stealth".

Elsewhere, Marks & Spencer was knocked lower by a downgrade to ‘neutral’ at Goldman Sachs.

Outsourcer Capita bucked the trend after saying it was in exclusive talks with private equity firm Montagu over the potential sale of its Education Software Solutions unit.

Market Movers

FTSE 100 (UKX) 6,307.70 -0.87%
FTSE 250 (MCX) 19,224.21 -0.89%
techMARK (TASX) 3,898.79 -0.60%

FTSE 100 - Risers

Fresnillo (FRES) 1,118.50p 2.76%
HSBC Holdings (HSBA) 405.50p 1.92%
Diageo (DGE) 2,936.50p 0.27%
Glencore (GLEN) 212.65p 0.21%
BHP Group (BHP) 1,731.20p 0.17%
Flutter Entertainment (FLTR) 13,865.00p 0.14%
Sage Group (SGE) 600.20p 0.13%
RSA Insurance Group (RSA) 675.80p 0.12%
Schroders (SDR) 3,178.00p 0.03%
Unilever (ULVR) 4,571.00p -0.24%

FTSE 100 - Fallers

British Land Company (BLND) 464.10p -2.54%
Taylor Wimpey (TW.) 154.55p -2.49%
Land Securities Group (LAND) 660.80p -2.46%
Pearson (PSON) 639.60p -2.35%
Barratt Developments (BDEV) 614.40p -2.32%
International Consolidated Airlines Group SA (CDI) (IAG) 160.95p -2.25%
Hargreaves Lansdown (HL.) 1,415.00p -2.25%
Persimmon (PSN) 2,630.00p -2.19%
Legal & General Group (LGEN) 254.80p -2.19%
Intermediate Capital Group (ICP) 1,618.00p -2.18%

FTSE 250 - Risers

XP Power Ltd. (DI) (XPP) 4,700.00p 7.31%
4Imprint Group (FOUR) 2,470.00p 2.92%
Contour Global (GLO) 200.00p 2.46%
Capita (CPI) 45.71p 1.87%
TUI AG Reg Shs (DI) (TUI) 524.80p 1.67%
Allianz Technology Trust (ATT) 2,770.00p 1.47%
European Opportunities Trust (JEO) 714.00p 1.42%
Henderson Smaller Companies Inv Trust (HSL) 986.00p 1.13%
Liontrust Asset Management (LIO) 1,375.00p 1.10%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 845.00p 1.08%

FTSE 250 - Fallers

SSP Group (SSPG) 322.00p -3.59%
Marks & Spencer Group (MKS) 125.95p -3.26%
Rotork (ROR) 296.80p -3.13%
Trainline (TRN) 455.00p -2.94%
WH Smith (SMWH) 1,396.00p -2.92%
Morgan Sindall Group (MGNS) 1,352.00p -2.59%
IWG (IWG) 321.60p -2.55%
Vivo Energy (VVO) 81.90p -2.50%
Grafton Group Ut (GFTU) 823.50p -2.49%
Cairn Energy (CNE) 157.70p -2.41%